I still believe that private profits should also result in private losses. I remember back last year having a discussion with a prominent Australian Venture Capitalist. He held a strong view that the bailout activities were justified, while my view was strongly opposed.

He said:

“If a child trips and skins its knee that’s fine, but there is no point letting it fall from a 10 story building. The consequences are too great”

I said:

“It’s not a child, they’re investment bankers. And maybe what we need right now is a few of them splattered on the sidewalk.”

My view has not changed.

But it seems the general populous has a short memory as the rot is returning very quickly. In fact, it might do both our economy and our environment good to let the current system bleed for a while. Why not allow time for new eco-friendly industries and egalitarian reward systems arrive?

Share:

In a free market private profits should also result in provite losses – not public sharing.

If the crisis didn’t happen the US taxpayers would not have shared in the upside – so why should they bail them out? The fact is – the hard economic lessons need to be learned. The USA economy needs the pain of a recession to re-calibrate the market mechanics and the ‘philosophy’ of the market participants. Unless reality hits – more events of this nature will occur.